Tom Tancredo on Tax Reform

Republican Representative (CO-6)

Believe in a fair tax system

Everyone that is presently paying tax, you could be--you can make a case that they’re paying too much. The reality is, of course, you need a different system entirely.
We do need to move away from this archaic--a system that taxes productivity, which is what we do, to a system that allows for a fair tax. I believe in that.

Source: 2007 Des Moines Register Republican Debate
, Dec 12, 2007

Promise to oppose any efforts to raise taxes

Q: Would you promise to the people watching this right now, that you will oppose and veto any efforts to raise taxes as long as you’re president?

A:
Yes. I have the highest rating from the American Conservative Union of anybody. I also have the highest rating from the Americans for Tax Reform.

Takes the oath: no tax increase

Q: Are you prepared to say categorically that under your administration, there will be no tax increase?

A: Absolutely. I’ll take the oath. The fact is this, that when
we talk about spending cuts, we have to think about what exactly it is that pushes spending at the federal level, which is mandatory spending. If you want to control federal spending, you must look at Social Security and Medicare.

Source: 2007 Republican debate in Dearborn, Michigan
, Oct 9, 2007

Co-sponsored FairTax because income tax manipulates behavior

Q: The FairTax would eliminate the income tax, estate tax, payroll tax and capital gains tax and replace it with a 23% sales tax. Do you support it?

A: The reason why we absolutely need to go to something like a FairTax--and I am a co-sponsor.
And by the way, if you don’t understand how it would work, I would suggest to you that you read Neil Boortz’s book and John Linder’s. It’s a perfect explanation of how it works. But the most important reason to move from an income tax to a
FairTax is because an income tax is designed to manipulate behavior. It gives the government the power to manipulate your behavior. “I reward you for the things I want you to do by giving you a tax cut. I penalize you for the things
I don’t want you to do by raising your taxes.” That is too much power for the federal government. It is always going to be an overreach of power.

Support the fair tax & repeal of the 16th Amendment

Q: In addition to the Bush tax cut, name a tax you’d like to cut.

A: I absolutely support the fair tax. It has to be accompanied, however, with the repeal of the 16th Amendment or we’d end up with a consumption tax and an income tax.
But you will not touch the deficit until you actually deal with the structural problem in mandatory spending. That’s where all the money is. It is, in fact, mandatory spending that has to be dealt with, or forget the idea of deficit spending.

Voted NO on extending AMT exemptions to avoid hitting middle-income.

extend through 2008 the offset of personal tax credits against AMT tax liabilities;

treat net income and loss from an investment services partnership interest as ordinary income and loss;

deny major integrated oil companies a tax deduction for income attributable to domestic production of oil or gas.

Wikipedia.com Explanation: The AMT became operative in 1970. It was intended to target 155 high-income households that had been eligible for so many tax benefits that they owed little or no income tax under the tax code of the time. However, when Ronald Reagan signed the Tax Reform Act of 1986, the AMT was greatly expanded to aim at a different set of deductions that most Americans receive.

The AMT sets a minimum tax rate of 26% or 28% on some taxpayers so that they cannot use
certain types of deductions to lower their tax. By contrast, the rate for a corporation is 20%. Affected taxpayers are those who have what are known as "tax preference items". These include long-term capital gains, accelerated depreciation, & percentage depletion.

Because the AMT is not indexed to inflation, an increasing number of upper-middle-income taxpayers have been finding themselves subject to this tax. In 2006, an IRS report highlighted the AMT as the single most serious problem with the tax code.

For 2007, the AMT Exemption was not fully phased until [income reaches] $415,000 for joint returns. Within the $150,000 to $415,000 range, AMT liability typically increases as income increases above $150,000.

OnTheIssues.org Explanation: This vote extends the AMT exemption, and hence avoids the AMT affecting more upper-middle-income people. This vote has no permanent effect on the AMT, although voting YES implies that one would support the same permanent AMT change.

Voted YES on making permanent an increase in the child tax credit.

Vote to pass a bill that would permanently extend the $1,000 per child tax credit that is scheduled to revert to $700 per child in 2005. It would raise the amount of income a taxpayer may earn before the credit begins to phase out from $75,000 to $125,000 for single individuals and from $110,000 to $250,000 for married couples. It also would permit military personnel to include combat pay in their gross earnings in order to calculate eligibility for the child tax credit.

Voted YES on permanently eliminating the marriage penalty.

Vote to pass a bill that would permanently extend tax provisions eliminating the so-called marriage penalty. The bill would make the standard deduction for married couples double that of single taxpayers. It would also increase the upper limit of the 15 percent tax bracket for married couples to twice that of singles. It also would make permanent higher income limits for married couples eligible to receive the refundable earned-income tax credit.

Voted YES on making the Bush tax cuts permanent.

Vote to pass a bill that would permanently extend the cuts in last year's $1.35 trillion tax reduction package, many of which are set to expire in 2010. It would extend relief of the marriage penalty, reductions in income tax rates, doubling of the child tax credit, elimination of the estate tax, and the expansion of pension and education provisions. The bill also would revise a variety of Internal Revenue Service tax provisions, including interest, and penalty collection provisions. The penalties would change for the failure to pay estimated taxes; waive minor, first-time error penalties; exclude interest on unintentional overpayments from taxable income; and allow the IRS greater discretion in the disciplining of employees who have violated policies.

Voted YES on Tax cut package of $958 B over 10 years.

Vote to pass a bill that would cut all income tax rates and make other tax cuts of $958.2 billion over 10 years. The bill would convert the five existing tax rate brackets, which range from 15 to 39.6 percent, to a system of four brackets with rates of 10 to 33 percent.

Voted YES on eliminating the "marriage penalty".

Vote on a bill that would reduce taxes for married couple by approximately $195 billion over 10 years by removing provisions that make taxes for married couples higher than those for two single people. The bill is identical to HR 6 that was passed by the House in February, 2000.

Voted YES on $46 billion in tax cuts for small business.

Provide an estimated $46 billion in tax cuts over five years. Raise the minimum wage by $1 an hour over two years. Reduce estate and gift taxes, grant a full deduction on health insurance for self-employed individuals, increase the deductible percentage of business meal expenses to 60 percent in 2002, and designate 15 renewal communities in urban rural areas.

Phaseout the death tax.

Tancredo co-sponsored the Death Tax Elimination Act:

Title: To amend the Internal Revenue Code of 1986 to phaseout the estate and gift taxes over a 10-year period.

Summary: Repeals, effective January 1, 2011, current provisions relating to the basis of property acquired from a decedent. Provides with respect to property acquired from a decedent dying on January 1, 2011, or later that:

property shall be treated as transferred by gift; and

the basis of the person acquiring the property shall be the lesser of the adjusted basis of the decedent or the fair market value of the property at the date of the decedent's death.

Requires specified information to be reported concerning non-cash assets over $1.3 million transferred at death and certain gifts exceeding $25,000.

Makes the exclusion of gain on the sale of a principal residence available to heirs.

Revises current provisions concerning the transfer of farm real to provide that gain on such
exchange shall be recognized to the estate only to the extent that the fair market value of such property exceeds such value on the date of death.

Provides a similar rule for certain trusts.

Amends the special rules for allocation of the generation-skipping tax (GST) exemption to provide that if any individual makes an indirect skip during such individual's lifetime, any unused portion of such individual's GST exemption shall be allocated to the property transferred to the extent necessary to make the inclusion ratio for such property zero; and

if the amount of the indirect skip exceeds such unused portion, the entire unused portion shall be allocated to the property transferred.

Provides that, if an allocation of the GST exemption to any transfers of property is deemed to have been made at the close of an estate tax inclusion period, the value of the property shall be its value at such time.

Abolish IRS--replace income tax with national sales tax.

Tancredo co-sponsored the Fair Tax Act to abolish the IRS

A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States. The Fair Tax Act of 2003 amends the Internal Revenue Code to repeal subtitle A (Income Taxes), B (Estate and Gift Taxes), and C (Employment Taxes) of the Internal Revenue Code. Imposes a tax on the use or consumption of taxable property or services. Sets the tax rate at 23 percent for the calendar year 2005. Sets the rate, for years after 2005, at the combined sum of the general revenue rate (14.91 percent), the old-age survivors and disability rate, and the hospital insurance rate. Senate bill S.1493 is identical to House bill HR.25.

Every year National Taxpayers Union (NTU) rates U.S. Representatives and Senators on their actual votes—every vote that significantly affects taxes, spending, debt, and regulatory burdens on consumers and taxpayers. NTU assigned weights to the votes, reflecting the importance of each vote’s effect. NTU has no partisan axe to grind. All Members of Congress are treated the same regardless of political affiliation. Our only constituency is the overburdened American taxpayer. Grades are given impartially, based on the Taxpayer Score. The Taxpayer Score measures the strength of support for reducing spending and regulation and opposing higher taxes. In general, a higher score is better because it means a Member of Congress voted to lessen or limit the burden on taxpayers.
The Taxpayer Score can range between zero and 100. We do not expect anyone to score a 100, nor has any legislator ever scored a perfect 100 in the multi-year history of the comprehensive NTU scoring system. A high score does not mean that the Member of Congress was opposed to all spending or all programs. High-scoring Members have indicated that they would vote for many programs if the amount of spending were lower. A Member who wants to increase spending on some programs can achieve a high score if he or she votes for offsetting cuts in other programs. A zero score would indicate that the Member of Congress approved every spending proposal and opposed every pro-taxpayer reform.

Citizens for Tax Justice, founded in 1979, is not-for-profit public interest research and advocacy organization focusing on federal, state and local tax policies and their impact upon our nation. CTJ's mission is to give ordinary people a greater voice in the development of tax laws.
Against the armies of special interest lobbyists for corporations and the wealthy, CTJ fights for: